The U.S. Justice Department's Antitrust Division announced April 5 that it had arrested four individuals and indicted a fifth in connection with charges of conspiracy, mail fraud and money laundering involving the E-rate program.
According to the indictment, which was unsealed on April 2, Haider Bokhari, his wife, Kelly Bokhari, his mother, Shahida Bokhari, all of Kenosha, WI, and brother Qasim Bokhari, of St. Petersburg, FL, were arrested last week. A third brother, Raza Bokhari, was also indicted, but it believed to be living in Lahore, Pakistan, the department said.
According to the indictment, in 2001, Haider and Qasim Bokhari submitted invoices and other documents to the Universal Service Administrative Company, falsely claiming to have provided goods and services to two schools in Milwaukee and one in Chicago. Relying on those documents, USAC paid the two men more than $1.2 million for goods and services that were not delivered.
The indictment charges that the two men conspired with other family members to conduct financial transactions involving the proceeds of the fraud to conceal and disguise the unlawful activities. These transactions included wiring more than $600,000 to Pakistan, purchasing a home in Kenosha and acquiring several automobiles.
The Justice Department did not disclose the name of the company under which the family operated, or the schools in whose name the fraud was allegedly committed. However, on the Web site of the Schools and Libraries Division, Qasim Bokhari is listed as the SPIN/BEAR Contact for a company called Universal Consulting, LLC, with an address in Alexandria, VA. According to SLD data records, that company received $837,615 in the name of St. Anthony Elementary School and $234,867 in the name of Noah's Ark Preparatory School in Wisconsin and $216,259 in the name of Nuestra America Charter School in Illinois. Funding requests totaling close to $2 million at the three schools were rejected by the SLD because the requested services were found to be ineligible. All together, the company had sought a total of about $13.5 million from a number of small schools in those states.
The department said Haider and Qasim Bokhari face a maximum penalty of five years in jail, one year of supervised release and a $250,000 fine for each of the four mail fraud charges brought against them. The fine can be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime when those amounts are larger than the statutory fine. All five persons face multiple money laundering charges that each carry a maximum penalty of 20 years in jail, three years of supervised release and the greater of a $500,000 fine or twice the value of the property involved in the transactions.
The investigation was conducted jointly by the Antitrust Division, the FBI, the Internal Revenue Service, and the Federal Communications Commission's Office of Inspector General, with assistance from the U.S. Attorney's office for the Eastern District of Wisconsin.
"No child should suffer a second-rate education because his or her school cannot afford the latest technology," said R. Hewitt Pate, Assistant Attorney General in charge of the Antitrust Division. "The E-rate program was designed to assist children in our nation's neediest schools. Those who try to rip off and illegally profit from this important program will be prosecuted."